SRAX, Inc. (NASDAQ: SRAX), a financial technology company that unlocks data and insights for publicly traded companies through Sequire, its SaaS platform, is providing unaudited financial results for Q2 of 2021 today, August 16th, 2021.
Second Quarter 2021 and Recent Operational Highlights and Guidance
- Revenue for Q2 of $7.7M up 557% year-over-year, 41% sequentially quarter-over-quarter, exceeding previous guidance of $7M.
- Full-year revenue guidance increased from $25M - $27M to $30M - $32M
- Sequire bookings of $11.4M for Q2
- 10 consecutive quarters of Sequire SaaS growth
- Currently holding approximately $29M worth of marketable securities
- 225 public companies/partners have subscribed to Sequire, up 25 since our Q1 release
- Sequire revenue to be recognized from existing contracts in 2021: $23.6M as of this release.
- Third Quarter revenue guidance of $8.3M
SRAX less BIGtoken, Three months ended June 30, 2021
- Total Revenue was $7.1M, an increase of 803% as compared to the same period last year and an increase of 49% sequentially quarter-over-quarter.
- Gross Margin was 83% as compared to 97% in the same period last year.
- Operating Expenses were $5M as compared to $2.8M in the same period last year.
- EBITDA of $1.4M for an increase of $3M vs. ($1.6M) in Q1 2020, and a sequential quarter-over-quarter increase of $850k or 150% vs. Q1 2021
Three months ended June 30, 2021
- Total Revenue was $7.7M, an increase of 557% as compared to the same period last year and an increase of 41% sequentially quarter-over-quarter .
- Gross Margin was 81% as compared to 65% in the same period last year.
- Operating Expenses were $7.3M as compared to $4.0M in the same period last year.
- EBITDA increase of $2.2M, ($440K) vs ($2.6M) in Q2 2020 and an sequential quarter-over-quarter increase of $400k vs.($822K) Q1 2021
Video Call:
SRAX's Founder and CEO Christopher Miglino, and CFO Michael Malone will provide an operational and financial summary of Q2 2021 on a video call, with a live question and answer session, on Monday, August 16th, at 4:30 pm ET / 1:30 pm PT.
To register for the live webcast and view the presentation, please sign up here: https://srax-earnings-q2.mysequire.com
To access the conference by phone:
Dial in US +1 3462487799 | Meeting ID: 93255970733 | Passcode: 163778
The webcast will be available on srax.com following the scheduled conference call.
Non-GAAP Measures:
To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States (GAAP), we use the following non-GAAP financial measures: EBITDA. The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. In addition, these measures may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial measures. We believe these non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business. For more information on our non-GAAP financial measures and a reconciliation of GAAP to non-GAAP measures, please see the "Reconciliation of GAAP to Non-GAAP Results" table in this press release.
SRAX less BIGtoken EBITDA is defined as earnings before interest, taxes, depreciation and amortization, changes in the fair-value of derivative and warrant liabilities and certain additional one-time charges and excluding the results from our BIGtoken operations.
About SRAX:
SRAX (NASDAQ: SRAX) is a financial technology company that unlocks data and insights for publicly traded companies. Through its premier investor intelligence and communications platform, Sequire, companies can track their investors’ behaviors and trends and use those insights to engage current and potential investors across marketing channels. For more information on SRAX, visit srax.com.
Safe Harbor Statement:
This press release contains certain forward-looking statements that are based upon current expectations and involve certain risks and uncertainties within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words or expressions such as "anticipate," "plan," "will," "intend," "believe" or "expect" or variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including, without limitation, statements made with respect to expectations of our ability to increase our revenues, satisfy our obligations as they become due, report profitable operations and other risks and uncertainties as set forth in our Annual Report on Form 10-K for the year ended December 31, 2019, and our subsequent Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission. All forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, many of which are generally outside the control of SRAX and are difficult to predict. SRAX undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
| SRAX SEGMENT OPERATING RESULTS | ||||||||||||||||||
2Q 2021 | 1H 2021 | |||||||||||||||||
| SEGMENT | (Dollars, except GM%) | YoY $ Growth | YoY % Growth | (Dollars, except GM%) | YoY $ Growth | YoY % Growth | ||||||||||||
| Sequire | 7,160,000 | 6,370,000 | 806 | % | 11,420,000 | 10,470,000 | 1102 | % | ||||||||||
| BIGtoken | 850,000 | 470,000 | 124 | % | 1,700,000 | 1,130,000 | 198 | % | ||||||||||
| Other / Elim | (330,000 | ) | (330,000 | ) | n/a | (660,000 | ) | (660,000 | ) | n/a | ||||||||
| Revenue | 7,680,000 | 6,510,000 | 872 | % | 12,460,000 | 10,940,000 | 720 | % | ||||||||||
| Sequire | 5,940,000 | 5,170,000 | 671 | % | 8,820,000 | 7,810,000 | 773 | % | ||||||||||
| BIGToken | 620,000 | 410,000 | 195 | % | 1,200,000 | 890,000 | 287 | % | ||||||||||
| Other / Elim | (330,000 | ) | (330,000 | ) | n/a | (660,000 | ) | (660,000 | ) | n/a | ||||||||
| Gross margin | 6,230,000 | 5,250,000 | 709 | % | 9,360,000 | 8,040,000 | 609 | % | ||||||||||
| Gross margin percentage | 81 | % | 81 | % | 75 | % | 73 | % | ||||||||||
| Sequire | 1,400,000 | 2,970,000 | n/a | 1,962,000 | 4,943,000 | n/a | ||||||||||||
| BIGToken | (1,840,000 | ) | (990,000 | ) | n/a | (3,224,000 | ) | (668,000 | ) | n/a | ||||||||
| Other / Elim | - | - | n/a | - | - | n/a | ||||||||||||
| Adjusted EBITDA | (440,000 | ) | 1,980,000 | n/a | (1,262,000 | ) | 4,275,000 | n/a | ||||||||||
| CONSOLIDATED STATEMENT OF OPERATIONS | ||||||||
| For the Six Months Ended June 30, | ||||||||
2021 | 2020 | |||||||
| Revenues | $ | 13,119,000 | $ | 1,516,000 | ||||
| Cost of revenues | 3,103,000 | 508,000 | ||||||
| Gross profit | 10,016,000 | 1,008,000 | ||||||
76.35 | ||||||||
| Employee related costs | 5,143,000 | 4,249,000 | ||||||
| Marketing and selling expenses | 3,030,000 | 690,000 | ||||||
| Platform Costs | 218,000 | 258,000 | ||||||
| Depreciation and amortization | 756,000 | 630,000 | ||||||
| General and administrative | 3,364,000 | 2,304,000 | ||||||
12,511,000 | 8,131,000 | |||||||
| Loss from operations | (2,495,000 | ) | (7,123,000 | ) | ||||
| Other income (expense) | ||||||||
| Interest income | 23,000 | |||||||
| Financing Costs | (15,430,000 | ) | (2,038,000 | ) | ||||
| Gain (loss) from marketable securities | (68,000 | ) | 516,000 | |||||
| Other income | 14,000 | |||||||
| Change in fair value of derivative liabilities | - | 321,000 | ||||||
| Total other income (loss) | (15,461,000 | ) | (1,201,000 | ) | ||||
| Loss before provision for income taxes | (17,956,000 | ) | (8,324,000 | ) | ||||
| Provision for income taxes | - | - | ||||||
| Net income (loss) | (17,956,000 | ) | (8,324,000 | ) | ||||
| Net (income) loss attributable to noncontrolling interest | 1,126,000 | - | ||||||
| Net income attributable to SRAX, Inc. | $ | (16,830,000 | ) | $ | (8,324,000 | ) | ||
| Net income / ( loss) per share, basic and diluted | $ | (0.78 | ) | $ | (0.59 | ) | ||
| Weighted average shares outstanding - basic and diluted | 21,533,141 | 14,038,940 | ||||||
| CONSOLIDATED BALANCE SHEET | ||||||||
As of June 30, | As of December 31, | |||||||
2021 | 2020 | |||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 10,060,000 | $ | 451,000 | ||||
| Accounts receivable | 2,172,000 | 2,608,000 | ||||||
| Prepaid expenses | 1,125,000 | 367,000 | ||||||
| Securities held for sale | 24,130,000 | 8,447,000 | ||||||
| Current assets | 37,487,000 | 11,873,000 | ||||||
| Notes receivable | 917,000 | 893,000 | ||||||
| Property and equipment | 161,000 | 118,000 | ||||||
| Intangible assets | 2,046,000 | 2,409,000 | ||||||
| Right of use assets | 314,000 | 366,000 | ||||||
| Other assets | 36,000 | 3,000 | ||||||
| Goodwill | 23,351,000 | 23,351,000 | ||||||
| Total Assets | $ | 64,312,000 | $ | 39,013,000 | ||||
| Liabilities and stockholders' equity | ||||||||
| Accounts payable and accrued liabilities | $ | 3,328,000 | $ | 3,561,000 | ||||
| Other current liabilities | 1,408,000 | 3,869,000 | ||||||
| Deferred revenue | 13,186,000 | 4,842,000 | ||||||
| Payroll protection loan - current portion | 1,126,000 | 747,000 | ||||||
| OID notes payable - current portion | 2,701,000 | 6,016,000 | ||||||
| Current liabilities | 21,749,000 | 19,035,000 | ||||||
| Right to use liability - long term | 182,000 | 243,000 | ||||||
| Payroll protection loan - long term | 379,000 | |||||||
| Deferred Tax Liability | 131,000 | 131,000 | ||||||
| Total liabilities | 22,062,000 | 19,788,000 | ||||||
| Preferred stock | - | |||||||
| Class A common | 24,000 | 16,000 | ||||||
| Additional paid-in capital | 98,014,000 | 69,551,000 | ||||||
| Accumulated deficit | (67,172,000 | ) | (50,342,000 | ) | ||||
| Total SRAX shareholders' equity | 30,866,000 | 19,225,000 | ||||||
| Non-controlling interest | 11,384,000 | - | ||||||
| Total stockholders' equity | 42,250,000 | 19,225,000 | ||||||
| Total liabilities and stockholders' equity | $ | 64,312,000 | $ | 39,013,000 | ||||
- | - | |||||||
| Working Capital | 15,738,000 | (7,162,000 | ) | |||||
| CONSOLIDATED BALANCE SHEET | ||||||||||||||||||||
Common Stock | ||||||||||||||||||||
| Shares | Amount | Additional Paid-in Capital | Non Controlling Interest | Accumulated Deficit | Stockholders' Equity | |||||||||||||||
- | ||||||||||||||||||||
| Balance, December 31, 2020 | 16,145,778 | 16,000 | 69,551,000 | - | (50,342,000 | ) | 19,225,000 | |||||||||||||
| Share based compensation | 253,000 | 253,000 | ||||||||||||||||||
| Shares issued for warrant exercise, net of offering costs | 4,945,320 | 5,000 | 12,215,000 | 12,220,000 | ||||||||||||||||
| Shares issued for cash | 53,616 | - | 284,000 | 284,000 | ||||||||||||||||
| Conversions | 2,041,551 | 2,000 | 3,445,000 | 3,447,000 | ||||||||||||||||
| Warrants issued as inducement to exercise warrants | 7,737,000 | 7,737,000 | ||||||||||||||||||
| Warrants issued by FVPD for SRAX, Inc. debenture holders | 885,000 | 885,000 | ||||||||||||||||||
| Beneficial conversion feature FPVD series B convertible preferred stock | 5,775,000 | 5,775,000 | ||||||||||||||||||
| Series B convertible preferred stock issued by FPVD | 5,775,000 | 5,775,000 | ||||||||||||||||||
| Acquisition of noncontrolling interest | (95,000 | ) | (95,000 | ) | ||||||||||||||||
| Net Income (Loss) | (854,000 | ) | (11,090,000 | ) | (11,944,000 | ) | ||||||||||||||
| Balance, March 31, 2021 | 23,186,265 | 23,000 | 93,485,000 | 11,486,000 | (61,432,000 | ) | 43,562,000 | |||||||||||||
| Share based compensation | 253,000 | 253,000 | ||||||||||||||||||
| Conversion of convertible debt to equity | 350,000 | - | 701,000 | 701,000 | ||||||||||||||||
| Shares issued for warrant exercise, net of offering costs | 1,310,198 | 1,000 | 3,575,000 | 3,576,000 | ||||||||||||||||
| Beneficial conversion feature FPVD series B convertible preferred stock | 85,000 | 85,000 | ||||||||||||||||||
| Series B convertible preferred stock issued by FPVD | 85,000 | 85,000 | ||||||||||||||||||
| Net Income (Loss) | (272,000 | ) | (5,740,000 | ) | (6,012,000 | ) | ||||||||||||||
| Balance, June 30, 2021 | 24,846,463 | 24,000 | 98,014,000 | 11,384,000 | (67,172,000 | ) | 42,250,000 | |||||||||||||
24,846,463 | 24,000 | 98,014,000 | 11,384,000 | (67,172,000 | ) | 42,250,000 | ||||||||||||||
| Common Stock | ||||||||||||||||||||
| Shares | Amount | Additional Paid-in Capital | Accumulated Deficit | Stockholders' Equity | ||||||||||||||||
| Balance, December 31, 2019 | 13,997,452 | $ | 14,000 | $ | 48,129,000 | $ | (35,637,000 | ) | $ | 12,506,000 | ||||||||||
| Share based compensation | - | - | 260,000 | - | 260,000 | |||||||||||||||
| Relative fair value of warrants issued with notes payable | - | - | 83,000 | - | 83,000 | |||||||||||||||
| Shares issued for extension agreement | 36,700 | - | 71,000 | - | 71,000 | |||||||||||||||
| Net loss | (3,003,000 | ) | (3,003,000 | ) | ||||||||||||||||
| Balance, March 31, 2020 | 14,034,152 | 14,000 | 48,543,000 | (38,640,000 | ) | 9,917,000 | ||||||||||||||
| Share based compensation | 246,000 | 246,000 | ||||||||||||||||||
| Reclassification of warrants from liability to equity | - | - | 4,076,000 | - | 4,076,000 | |||||||||||||||
| Shares issued for debt extinguishment | 100,000 | - | 181,000 | - | 181,000 | |||||||||||||||
| Premium on debt extinguishment | - | - | 46,000 | - | 46,000 | |||||||||||||||
| Beneficial conversion feature | - | - | 3,913,000 | - | 3,913,000 | |||||||||||||||
| Relative fair value of warrants issued with notes payable | 2,889,000 | 2,889,000 | ||||||||||||||||||
| Net loss | - | - | - | (5,321,000 | ) | (5,321,000 | ) | |||||||||||||
| Balance, June 30, 2020 | 14,134,152 | $ | 14,000 | $ | 59,894,000 | (43,961,000 | ) | $ | 15,947,000 | |||||||||||
| Checking | ||||||||||||||||||||
| Per June 2020 1Q | 14,134,152 | 14,000 | 59,894,000 | (43,961,000 | ) | 15,947,000 | ||||||||||||||
| Difference | ||||||||||||||||||||
| CONSOLIDATED STATEMENT OF CASH FLOWS | ||||||||
| For the Six Months Ended June 30, | ||||||||
2021 | 2020 | |||||||
| Cash Flows From Operating Activities | ||||||||
| Net Loss | $ | (17,956,000 | ) | $ | (8,324,000 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Interest income | (24,000 | ) | ||||||
| Unrealized loss (gain) on Securities held for sale | 878,000 | (140,000 | ) | |||||
| Realized loss (gain) on Securities held for sale | (810,000 | ) | (376,000 | ) | ||||
| Warrants issued by FVPD for SRAX, Inc. debenture holders | 885,000 | |||||||
| Stock-based compensation | 506,000 | 506,000 | ||||||
| Amortization of debt issue costs | 686,000 | 453,000 | ||||||
| Loss on extinguishment of debt | 1,103,000 | |||||||
| Recognition of beneficial conversion feature - FPVD preferred B | 5,860,000 | |||||||
| Warrant inducement charge | 7,737,000 | |||||||
| Change in fair value of derivative liabilities | (321,000 | ) | ||||||
| Marketable securities received for accounts receivable previously written off | (409,000 | ) | ||||||
| Provision for bad debts | 79,000 | 41,000 | ||||||
| Depreciation expense | 39,000 | 38,000 | ||||||
| Amortization of intangibles | 717,000 | 592,000 | ||||||
| Non-cash financing expense | 147,000 | |||||||
| Change in right of use of asset | 52,000 | |||||||
| Changes in operating assets and liabilities | ||||||||
| Accounts receivable | 766,000 | 117,000 | ||||||
| Prepaid expenses | (757,000 | ) | 352,000 | |||||
| Marketable securities | - | |||||||
| Other current assets | (1,000 | ) | 95,000 | |||||
| Accounts payable and accrued expenses | (233,000 | ) | 1,527,000 | |||||
| Other current liabilities | (10,754,000 | ) | (354,000 | ) | ||||
| Change in right of use liability | (61,000 | ) | (43,000 | ) | ||||
| Net Cash Used in Operating Activities | (12,789,000 | ) | (4,734,000 | ) | ||||
| Cash Flows From Investing Activities | ||||||||
| Available for Sale Securities | 2,890,000 | 397,000 | ||||||
| Deferred payments to LD Micro | (2,004,000 | ) | ||||||
| Net cash received from acquisition of FPVD | 955,000 | |||||||
| Acquisition of P& E | (82,000 | ) | - | |||||
| Development of software | (354,000 | ) | (575,000 | ) | ||||
| Other assets | (33,000 | ) | 3,000 | |||||
| Net Cash Used by Investing Activities | 1,508,000 | (175,000 | ) | |||||
| Cash Flows From Financing Activities | ||||||||
| Proceeds from issuance of notes payable less issuance costs | 8,415,000 | |||||||
| Proceeds from payroll protection program | 1,074,000 | |||||||
| Issuance of Preferred Stocks | 4,810,000 | |||||||
| Proceeds from issuance of shares | 284,000 | |||||||
| Proceeds from the exercise of warrants | 15,796,000 | |||||||
| Net Cash Provided by Financing Activities | 20,890,000 | 9,489,000 | ||||||
| Net increase (decrease) in Cash | 9,609,000 | 4,580,000 | ||||||
| Cash, Beginning of Period | 451,000 | 32,000 | ||||||
| Cash, End of Period | $ | 10,060,000 | $ | 4,612,000 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for interest | $ | 14,000 | $ | 52,000 | ||||
| Cash paid for income taxes | $ | - | $ | - | ||||
| Noncash investing and financing activities: | ||||||||
| Convertible notes converted into shares | $ | 6,422,000 | $ | |||||
| Fair value of marketable securities received for revenue contracts | $ | 18,641,000 | $ | |||||
| Vesting of prepaid common stock award | $ | $ | 94,000 | |||||
| Relative fair value of warrants issued with term loan | $ | $ | 83,000 | |||||
| Shares of common stock issued for extension agreement | $ | $ | 71,000 | |||||
| NON-GAAP TO GAAP RECONCILIATIONS | ||||||||||||||||
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
| Consolidated | ||||||||||||||||
| Operating Income | $ | (1,040,000 | ) | $ | (3,248,000 | ) | $ | (2,495,000 | ) | $ | (7,123,000 | ) | ||||
| Depreciation and Amortization | 347,000 | 321,000 | 727,000 | 630,000 | ||||||||||||
| Stock-based compensation expense | 253,000 | 294,000 | 506,000 | 648,000 | ||||||||||||
| Adjusted EBITDA | (440,000 | ) | (2,633,000 | ) | (1,262,000 | ) | (5,845,000 | ) | ||||||||
| SRAX | ||||||||||||||||
| Operating Income | 939,000 | (2,007,000 | ) | 1,011,000 | (3,773,000 | ) | ||||||||||
| Depreciation and Amortization | 208,000 | 192,000 | 445,000 | 381,000 | ||||||||||||
| Stock-based compensation expense | 253,000 | 245,000 | 506,000 | 411,000 | ||||||||||||
| Adjusted EBITDA | 1,400,000 | (1,570,000 | ) | 1,962,000 | (2,981,000 | ) | ||||||||||
| BIGToken | ||||||||||||||||
| Operating Income | (1,979,000 | ) | (1,028,000 | ) | (3,506,000 | ) | (3,042,000 | ) | ||||||||
| Depreciation and Amortization | 139,000 | 129,000 | 282,000 | 249,000 | ||||||||||||
| Stock-based compensation expense | - | 49,000 | - | 237,000 | ||||||||||||
| Adjusted EBITDA | (1,840,000 | ) | (850,000 | ) | (3,224,000 | ) | (2,556,000 | ) | ||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20210816005242/en/
Contacts:
investors@srax.com
